Why UBS Cut Carlyle (CG) Farooq Thu, November 12, 2026 at 3:57 PM EST 3 min read CG -4.28% ^GSPC -0.35% ^IXIC -0.39% Trade CG on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
We just published a list of the 10 Stocks Analysts Are Downgrading Right Now and Carlyle Group (NASDAQ:CG) ranked 7th on this list.
Stocks slid again on Tuesday after a hotter-than-expected inflation report fed bets on higher interest rates, and all three major indexes finished lower. The Dow fell 0.30% to 52,231.89, the S&P 500 lost 0.38% to 7,520.93, and the Nasdaq Composite dropped 0.74% to 25,065.87.
Government data showed consumer prices rose 0.4% in October, the third straight monthly gain of at least that size, against the 0.3% economists expected. Core prices rose 0.3%, ahead of a 0.2% forecast, and traders spent the session weighing how many more rate increases may be coming.
Federal Reserve Governor Christopher Waller said the central bank should raise rates in December and consider a half-point increase, while Dallas Federal Reserve President Lorie Logan said at least two more quarter-point hikes are needed. Traders now see an 84% chance of a quarter-point move next month and a 15% chance of a half-point increase.
Jason Ware, chief investment officer at Albion Financial Group, told Reuters that investors are spooked by the possibility of a 50 basis point hike. That worry landed on a market that had already taken a beating: the Nasdaq closed nearly 12% below its October peak last week, and the S&P 500 sank 4.4% in a single session, its worst day since April 2025. For the other side of that debate, see our list of oversold AI stocks where Wall Street analysts see 50%+ upside.
Skyler Weinand, chief investment officer at Regan Capital, said stocks have seen a heavy rotation out of AI-related names and into defensive sectors such as healthcare. Technology took the sharpest hit. Last week the S&P 500 technology sector fell 7.3% and the Philadelphia semiconductor index dropped more than 12% as fears of a data-center slowdown spread after the midterm elections.
Oxford Economics expects the Fed to raise rates in December and again in March, while Kansas City Fed President Jeff Schmid described policy as still accommodative.
Carlyle made it to our list because it drew an analyst downgrade on November 10 and has an average upside potential of 18%. UBS downgraded Carlyle to Neutral from Buy on November 10 and lowered its price target to $47 from $60, saying weak fund returns and fundraising delays put the firm's 2028 growth targets at risk.
Carlyle is an investment firm that manages $479 billion across private equity, credit and other strategies. Its third-quarter distributable earnings rose 17% to $1.12 a share on fund exits, while fee-related earnings fell 6%. The firm raised $11 billion in the quarter and expects at least $20 billion more in the fourth, and $28 billion of committed assets are waiting to start paying fees. Realized proceeds from carry funds reached $9 billion, net accrued performance revenue stood at $2.1 billion, and management describes the firm as early in a multiyear fundraising cycle expected to extend through 2027 and 2028. Chief Executive Officer Harvey Schwartz named slower fundraising over the past year, lower fee-related earnings and weaker valuations in parts of the buyout portfolio as key risks to Carlyle's outlook. He also said the firm has returned close to $100 billion to fund investors since the start of 2024. The shares fell 6.7% after the report.
While we acknowledge the risk and potential of CG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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